Posted in: Tips
In a video interview with Gary Corcoran for International Adviser, Chief Executive of RL360° David Kneeshaw has revealed that he expects to see commission disclosure rolled out on a global basis.
When asked about industry regulations, he stated that some change is “necessary and desirable” and noted that he thinks commission disclosure will happen “in very short order”. The expert said he believes this development will be implemented within 2 to 5 years and it will happen “across the world because regulators will insist that it’s done at a manufacturing level” (meaning by the life companies or the investment businesses).
Mr. Kneeshaw suggested that it doesn’t matter where businesses are based, whether they are on the Isle of Man, Guernsey, Cayman Islands, or elsewhere; over time, the same rules will be implemented in all jurisdictions.
He also predicted that there will be a slight curtailing of some of the investor funds and suggested there will be more due diligence done by life companies on advisers. According to Mr. Kneeshaw, some advisers will benefit from the changes and will thrive in the new environment, but some won’t.
The impact on RL360
Asked how the developments will impact RL360° when they are rolled out internationally, he said the company will have to change in a number of ways. For example, it will have to restructure its products so that it can adapt to commission disclosure and it may have to lessen indemnity or upfront commission, although this will be driven by the advisers. In addition, the business will probably have to put in place some rules that show the funds it has that are available on its platforms satisfy the retail market rather than the expert investor institutional market. Mr. Kneeshaw also said that the company will have to put stronger governance rules in place in the way it builds relationships with advisors to check that they are companies that are safe to deal with from a risk point of view.
He went on to emphasize that he was not speaking specifically from his business’s point of view but was commenting on generic, worldwide industry trends.
No stranger to change
RL360° is no stranger to change. In May 2015, the company announced it was acquiring CMI Insurance Company Limited from Lloyds Banking Group and the deal was completed on 30 November. It also continues to update its product range on a regular basis, including its RL360° PIMS and Quantum products.